Loop,ꟷan initiative that links major consumer product brands, retailers and Terracycle,ꟷis generating a lot of excitement since its announcement in January at the Davos World Economic Forum. Loop, which will actually launch in May, is a shopping concept that will deliver common household food products in packaging that is made to be used multiple times. The system will be tested in Paris and New York as a first step, with London, Toronto and Tokyo expected to be added later in 2019.
Consumers are becoming increasingly aware of packaging waste and its effect on the environment. Meanwhile, many packaged goods companies are taking note and responding by committing to massively reduce waste by making their packaging recyclable or reusable. This program is designed to close the packaging loop, helping to create a circular economy.
Loop is being developed by Terracycle, a New Jersey company that specializes in creative ways of handling materials that are difficult to recycle. More than 20 major consumer packaged goods companies, including Unilever, Procter & Gamble, Nestle, PepsiCo, Mondelez, Coca-Cola and Clorox, have signed on to the program. Other partners include logistics company UPS and European retailers Carrefour and Tesco.
The Loop program is reminiscent of the milk delivery model of yesteryear with some updated twists. Tom Szaky, Terracycle CEO and founder, says Loop was designed to help CPGs solve the negatives of single-use packaging disposability while maintaining the positive benefits of convenience and affordability. Loop acts as consultant and coordinator for the brands. It will manage the collection of, sorting, cleaning and return of packages to the brand owners for refilling and reuse, effectively providing the waste management function.
Who should own the package?
This will be achieved, he says, by challenging the current concept of packaging ownership in a pivot similar to what companies like Airbnb or Uber have done. “Why do consumers own packaging when they don’t really want to own it?” he asks, explaining that consumers buy shampoo and the bottle when they really don’t want to own the packaging. “The moment the packaging is empty it’s a problem consumers have to deal with by throwing it in the garbage or, ideally, being able to recycle the packaging.”
Loop will use a subscription model for customers, who can shop on Loop’s websites (www.loopstore.com and maboutiqueloop.fr) or on the websites of participating retailers. Loop customers can purchase products with fully recyclable packaging made from materials such as metal alloys, glass and engineered plastics designed to be used as many as a hundred times or more. Initially, the program will offer between 200 and 300 well-known products at a price comparable to regular retail prices, plus a refundable container deposit that can vary from pennies to dollars. Products will be delivered in a shipping tote designed by Terracycle and UPS that that can handle liquids, dry goods and personal care products, with protective dividers inside, while eliminating the need for single-use corrugated boxes.
When consumers are done with the product, they can put the packages—dirty with no cleaning at all—back in the container in which they received it. Loop then arranges free pickup and transport via UPS back to a cleaning facility where it is prepared for refilling. Customers can then receive their deposit back in full or order automated refills.
“Innovation is key to everything we do at UPS, and we are thrilled to support TerraCycle with packaging design for the Loop tote, as well as pickup and delivery services for Loop customers. As a leader in environmental sustainability, and a champion and catalyst for a circular economy, UPS looks forward to helping to bring Loop to life,” says Kate Gutman, UPS chief sales and solutions office.
Under the current scenario, packaging is a cost of goods to the consumer product company. That prompts CPGs to progressively make the packaging cheaper and cheaper, Szaky claims. That process makes packaging less recyclable and less exciting for the consumer.
Turn the package into an asset
Under the Loop system, packaging is always the property of the brand, becoming an asset that depreciates over the total number of uses. The package then becomes an investment in which durability is valued. Durability transforms packaging, Szaky says, making it worthwhile to invest in its reuse while embracing luxury designs and materials, such as Häagen Dazs’s double-wall, stainless-steel containers that add new functionality to keep ice cream frozen longer outside of the freezer.
Szaky says Loop has been under development for two years, and partner companies like Mondelez and Clorox have really been investing major resources to bring about transformational designs. More products and partners are being added each month. “The end-state goal is to have a durable Loop packaging alternative for any type of product you want from any retailers you want to buy from,” he says.
In recent years, many major brand owners have made public commitments to make their packaging reusable, recyclable or compostable by 2025. Unilever, for instance, has set a target to halve the waste associated with its products by 2020, including its plastic packaging. A Unilever representative told Brand Packaging that these targets are driving real change in the company’s business, in particular how they design their packaging for recyclability and reuse.
Unilever says the company is innovating and investing in new business models that harness refills and reusable packaging because they recognize recycling is not the only solution. “This is an important step, but no business can create a circular economy for consumer goods in isolation. That’s why alliances like Loop are important. “
Unilever started working on specialized Loop packaging for nine of its brands, ranging from soaps to mayonnaise, in the last half of 2018. For example, the deodorant brands Dove, Rexona (Degree in the U.S. and Sure in the U.K.) and AXE (Lynx in the U.K.) will test a completely new format: a refillable deodorant stick called minim.
Agile design speeds process
Depending on usage, the deodorant will last one month on average, with the packaging designed to last at least 100 cycles. This means that each pack is expected to last about eight years, with the potential to save up to 100 packs from being thrown away. The whole design process for minim only took four months.
“We learned from this process that simple is better,” says Augusto Garzon, Unilever global brand director, deodorants. “Our consumer testing with prototypes showed us that the minimal designs were the most popular, inspiring the name minim. For example, one previous version featured a button to push up more product, yet the most popular design was the one without. The design is simplistic and minimal, nothing unnecessary, and everything has a purpose.”
Pepsico, another partner in the Loop program, has been working with Terracycle on a variety of projects over the last few years, according to Roberta Barbieri, vice president, global sustainability. Most recently, Pepsico partnered with Terracycle on the launch of the Walker’s chip packet recycling scheme in the U.K. “Terracycle have already demonstrated their ability to find innovative solutions throughout the packaging lifecycle,” she says, “and when Loop was proposed, we were pleased to have
this opportunity to work with them again on the market trial
Pepsico has sought opportunities to make its packaging reusable as an important element of its sustainable packaging vision. “PepsiCo is striving for a world where plastics need never become waste,” Barbieri says. “We aim to achieve this by reducing the amount of plastic we use, recycling and reusing packaging material, and reinventing our plastic packaging by finding materials and models that work better. Loop provides us with an opportunity to develop and trial an innovative solution in the reusable packaging space and builds on the work we have already done through our ‘Beyond the Bottle’ strategy, which includes initiatives such as our recent acquisition of SodaStream and breakthrough innovations like Drinkfinity.”
Working in the e-commerce model
Barbieri says one of the exciting elements of Loop is the added convenience for consumers that the e-commerce model brings to reusable packaging. In Paris, Pepsico will offer two breakfast products, Tropicana Orange Juice and Quaker Chocolate Cruesli, in the new, reusable packaging format.
Reusability does bring an additional element of complexity, she says. Consumers naturally expect packaging that looks fresh and untampered, however reusable packaging needs to go through an intensive cleaning process and multiple uses. “Our design team have worked hard to create a solution that delivers a durable vessel that remains undamaged, and of course ensures no impact to the product quality, throughout the reuse cycles. This aspect has been key to maintaining aspirational and appealing packaging for consumers,” Barbieri says.
The Pepsico R&D team has worked to design reusable packaging that meets the high food safety standards, and it has partnered closely with Loop’s team of scientists to develop cleaning technology that ensures safe reuse.
“Our brand packaging has been developed with reuse in mind and so is designed for durability,” she says. “However, through the use of premium quality materials, we have created sleek designs which mean that the vessels can be out on display and blend into any environment whether in the kitchen or on the breakfast table.”
Mondelez takes sustainable step
Mondelez, another global consumer product company, has decided to use Milka chocolates and biscuits, one of its top European brands, in the launch for Loop, according to Charlotte Verhaeghe, Mondelez general manager in Paris. Currently, the company’s chocolates are in flow wrappers, and the biscuits (cookies) are sold in boxes. Mondelez’s sustainability efforts have primarily focused on sourcing quality ingredients. She says a very natural next step was to become involved in a sustainable packaging program, and the company expects it to be a game-changer.
Debora Koyama, chief marketing officer for Mondelez Europe, was approached about Loop in 2018. She immediately felt that it was an innovative initiative and signed onto the program with a high level of commitment and engagement. The company’s design process for Loop only began in September 2018. Mondelez will offer these products in stainless steel tins that are double the size of regular retail packaging.
Verhaeghe points out that the Milka product will initially be offered online in Paris. E-commerce is quite popular in the country, where a “click and collect” system in which people purchase or select items online and pick them up in-store or at a centralized collection point is used. The hybrid model is designed to streamline the processes involved in making in-store purchases and payments. However, Carrefour, France’s largest retailer, is another Loop partner that will offer Loop products through its e-commerce channels.
At this point, Loop is a pilot program. Terracycle and its partners conducted significant consumer research and testing before deciding to proceed with the project. All the CPGs interviewed indicated that consumers seem to be quite excited about the concept, but time will tell about their long-term acceptance of the program. seeking economy of scale
Szaky admits that brands must make an upfront investment in capital and other resources. Once the initiative hits a scale, though, brands should see substantially lower costs. Szaky says he faced the same skepticism from retailers. However, since French retailer Carrefour and British retailer Tesco signed on, he expects more retailers to partner up.
Laurent Vallée, general secretary of Carrefour Group, says, “Loop is a disruptive solution led by a visionary entrepreneur. Carrefour has a strong commitment to eliminating waste and plastic. It was a natural fit for Carrefour to commit to this great project, thus becoming the first player in the retail space to join Loop. We believe our clients are increasingly concerned with unnecessary waste, and we expect them to embrace this new solution. We hope other international manufacturers and retailers will join us to adopt new standards and fight waste.”
Americus Reed, a marketing professor at the University of Pennsylvania’s Wharton School, has called the zero-waste platform a brilliant idea. “One of the big things about socially conscious, environmentally friendly consumers is that oftentimes everyone will report that they want to do something, but when they’re asked to do something that inconveniences them, then they don’t want to do it,” he says. “This is an interesting way to make it really easy, in some senses, to be able to actually engage in that behavior that could signal … that you are this type of environmentally conscious and aware person.”
Reed’s associate at Wharton, Eric Orts, writes that the cost advantages of a circular economy are compelling. “If you think of all the different kinds of packaging that we use in the world, you can make it into a circular loop, and the genius of this is it costs less money because you don’t have all this waste,” says Orts. “It’s good news from an environmental point of view, and hopefully it will catch on and build some scale.”
“We hope that people get so excited about it that there is a big groundswell of discussion because Loop is not just for someone who wants to be environmentally friendly,” says Szaky. “I’d imagine you’d want Loop because it is the future of consumption. These products are groundbreaking redesigns, more convenient, packed with more function and, by the way, the concept of garbage doesn’t exist. These are already products that people know and love. I can’t imagine anyone not being excited by that.”
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